Police have concluded that there is “no evidence of criminality” over the awarding of community wellbeing grants by the last Labour administration at Lancashire County Council.

The authority’s audit, risk and governance committee last month requested that officers investigate whether there had been any “fraud, misconduct in public office or a criminal breach of electoral law”.

The cross-party group had received a report from independent auditors which was critical of the way the scheme had been administered in the run-up to the local elections in 2017 – but determined that the process had been lawful.

A separate police examination of that report found that the now leader of the Labour opposition, Azhar Ali, was “in a position to allocate a significant amount of money without the appropriate scrutiny” when he was the cabinet member for health and wellbeing at the time.

No evidence of wrongdoing

But a meeting of the full council heard that a senior detective had found no evidence of wrongdoing.

Labour members said the request to involve police had been politically motivated.

County Hall sign

"We don't know what happened to some of the money."

“The chair of the committee was advised [in the report] that no criminal actions took place, yet he allowed it to go forward asking for a criminal investigation,” deputy leader of the Labour opposition, John Fillis, told a meeting of the full council.

“The Conservatives have [tried] to smear councillors and that is an absolute disgrace.”

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But Conservative councillors rejected the charge and slammed how the £525,000 scheme had been run.

“We don’t know what happened to [some of] the money,” County Cllr Alan Vincent said. “We didn’t assess it, we didn’t monitor it and in some cases we can’t ever monitor it, because we didn’t get [the recipients] to agree to that monitoring in the first place.

“Don’t give me this nonsense that it’s some kind of Tory witch-hunt – it’s us exposing a terrible scheme,” he added.

No suggestion that charities or community groups were to blame

The meeting heard that nobody was suggesting that the charities and community groups which received the grants had done anything wrong.

Grant confirmation letters, outlining a requirement to report how the money was spent, were often sent after payment had been made. That meant it was difficult for the authority to demand progress reports and 44 percent of recipients have failed to comply with reminders to do submit them.

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County Cllr Ali said that he had “no regrets about allocating any of the money to the groups which I did”.

“Sometimes, when you commission a report, you get the outcomes that you want, but in this case, [the Conservatives] haven’t got the outcomes they’ve been seeking for over 12 months,” County Cllr Ali added.

Deputy chair of the council’s audit, risk and governance committee, Edward Nash, said it was “the least political” scrutiny group at County Hall.

What the audit report said

The independent audit report, which has now been made public, found that:

The process to assess and select projects was inadequate.

Approval of the projects was undertaken in line with the county council’s procedures, but the cabinet member should have limited his involvement to setting the overall scheme objectives.

Officers should have administered all other aspects of the scheme according to pre-determined criteria.

Council officers were satisfied that the grants would be used to support initiatives to improve public health and wellbeing.